"Despite near-term challenges in the macroeconomic and regulatory environment, we remain focused on creating long-term value and are confident in the strength of our core business and strategic positioning." – De Lyle Bloomquist, President and CEO of RYAM.
May 7, 2025 - Rayonier Advanced Materials Inc. (NYSE:RYAM) today reported results for its first quarter ended March 29, 2025.
"Despite near-term challenges in the macroeconomic and regulatory environment, we remain focused on creating long-term value and are confident in the strength of our core business and strategic positioning," said De Lyle Bloomquist, President and CEO of RYAM.
"Our first quarter results fell short of expectations, primarily due to several factors: a $12 million non-cash environmental charge, lower cellulose specialties sales volumes following accelerated customer purchases in the prior quarter ahead of a potential supply chain disruption, higher key input costs and operational challenges. In addition, demand in our Paperboard and High-Yield Pulp businesses remained soft.
"We are also navigating a dynamic global trade environment. Based on our most recent insight, approximately $85 million of RYAM annual revenues are currently exposed to a 125 percent import tariff from China. Additionally, we believe we are exposed to second-order effects as certain Cellulose Specialties customers adjust their supply chains in response to the tariffs. While some Chinese fluff customers have chosen to absorb the tariff and continue placing orders, we anticipate shifting production toward non-fluff commodities to help offset potential reductions in direct fluff sales to China and the likely softer demand resulting from these second-order effects.
"Considering these factors - the tariffs, poor first quarter operational performance, the weaker U.S. dollar, the one-time non-cash environmental charge and elevated key input costs - we now project 2025 Adjusted EBITDA to range between $175 million and $185 million. We also expect 2025 Adjusted Free Cash Flow to approximate $5 million to $15 million. With a strong balance sheet and ample liquidity, we remain confident in our ability to manage near-term pressures, meet our debt covenants and deliver long-term value for our shareholders," concluded Mr. Bloomquist.
The Company reported a net loss of $32 million, or $(0.49) per diluted share, for the quarter ended March 29, 2025 compared to a net loss of $2 million, or $(0.02) per diluted share, for the prior year quarter.
Beginning in January 2025, the Company reorganized its former High Purity Cellulose operating segment into three separate businesses: Cellulose Specialties, Cellulose Commodities and Biomaterials. No changes were made to the composition of the Paperboard and High-Yield Pulp operating segments. Prior period segment results have been recast to align with this new segment reporting structure.
Following the indefinite suspension of Temiscaming cellulose operations in the third quarter of 2024, certain infrastructure assets of the site's cellulose plant continue to run in support of the ongoing energy needs of the Paperboard and High-Yield Pulp operations. As such, beginning in the fourth quarter of 2024, the net impact of the custodial site costs being incurred and the sales of any electricity generated by the running of the cellulose plant assets are reflected within the operating results of the Paperboard and High-Yield Pulp businesses.
Net sales for the quarter decreased $5 million, or 2 percent, compared to the prior year quarter driven by a 2 percent decrease in sales volumes that was in line with expectations and primarily due to strong sales in the prior year quarter ahead of the indefinite suspension of Temiscaming cellulose operations. Partially offsetting the sales volume decrease was a 2 percent increase in sales prices that was lower than the Company's guidance of mid single-digits primarily due to the timing of orders and an unfavorable sales mix.
Operating income for the quarter decreased $7 million, or 18 percent, compared to the prior year quarter driven by the lower sales, higher key input costs and operational challenges at the plants in the current quarter, partially offset by the absence of prior year operating losses from cellulose operations due to the indefinite suspension of operations at the Temiscaming site in July 2024.
Compared to the fourth quarter of 2024, net sales decreased $40 million as sales volumes decreased 17 percent primarily due to elevated sales volumes in the prior quarter resulting from accelerated customer shipments ahead of potential supply chain disruptions. This decrease was partially offset by a 1 percent increase in sales prices. Operating income decreased $14 million primarily due to the lower sales volumes, operational challenges at the plants in the current quarter and the fourth quarter recognition of $7 million of energy cost benefits from sales of excess emission allowances. Offsetting these decreases were the higher sales prices and the fourth quarter impact of the Jesup plant fire.
Net sales for the quarter decreased $19 million, or 20 percent, compared to the prior year quarter. Sales volumes decreased 21 percent driven primarily by lower non-fluff commodity sales, partially offset by a 2 percent increase in sales prices due to stronger demand for fluff.
Operating loss for the quarter improved $6 million, or 32 percent, compared to the prior year quarter driven by lower commodity losses, partially offset by higher key input costs and operational challenges at the cellulose plants.
Compared to the fourth quarter of 2024, net sales decreased $15 million as sales volumes decreased 23 percent primarily due to elevated sales volumes in the prior quarter resulting from accelerated customer shipments ahead of potential supply chain disruptions and reduced production due to operational challenges in the current quarter. These decreases were partially offset by a 7 percent increase in sales prices. Operating loss improved $3 million primarily due to the higher sales prices and the fourth quarter impact of the Jesup plant fire. Offsetting these improvements were the lower sales volumes, operational challenges in the current quarter and $3 million of energy cost benefits from sales of excess emission allowances recognized in the fourth quarter.
Net sales and operating income were both flat in the current quarter compared to the prior year quarter. Increased sales from the April 2024 startup of the France bioethanol facility were offset by lower production in the current quarter due to operational challenges and the planned maintenance shutdown of the Tartas cellulose plant, which limited raw material supply due to the bioethanol facility's reliance on the Tartas cellulose plant for feedstock. In operating income, higher shared and ancillary service costs under the business's newly-established cost structure were offset by lower production costs as a result of the current quarter shutdown and reduced feedstock availability.
Compared to the fourth quarter of 2024, net sales decreased $1 million, impacted by the lower production in the current quarter due to the restricted raw material availability resulting from the operational challenges and planned maintenance shutdown. Operating income was flat as higher shared and ancillary service costs were offset by the lower production costs that resulted from the current quarter shutdown and reduced feedstock availability.
Net sales for the quarter decreased $4 million, or 8 percent, compared to the prior year quarter. Sales prices and volumes decreased 4 percent and 3 percent, respectively, driven by mix and continued competitive activity from European imports.
Operating results for the quarter declined $10 million, or 125 percent, compared to the prior year quarter driven by the lower sales prices and volumes, higher maintenance and purchased pulp costs and the impact of Temiscaming net custodial site costs.
Compared to the fourth quarter of 2024, operating results declined $6 million driven by 5 percent and 14 percent decreases in sales prices and volumes, respectively, due to mix, operational challenges and continued competitive activity from European imports, and a higher cost impact of the fourth quarter planned maintenance outage.
Net sales for the quarter decreased $3 million, or 9 percent, compared to the prior year quarter. Sales prices and volumes decreased 7 percent and 4 percent, respectively, driven by lower demand, continued oversupply in China and the timing of shipments, primarily related to shipping challenges to customers in India.
Operating loss for the quarter increased $6 million, or 600 percent, compared to the prior year quarter driven by the lower sales prices and volumes and the impact of Temiscaming net custodial site costs.
Compared to the fourth quarter of 2024, operating loss improved $1 million driven by lower maintenance and labor costs, partially offset by 1 percent and 2 percent decreases in sales prices and volumes, respectively.
RYAM's full First Quarter 2025 earnings report can be found on the company;s website: ryam.com
RYAM is a global leader of cellulose-based technologies, including cellulose specialties, a natural polymer commonly used in the production of filters, food, pharmaceuticals and other industrial applications.
SOURCE: RYAM